Pine Labs sets price band for its ₹3,900cr IPO
What's the story
Pine Labs, a leading digital payments and commerce solutions provider, has announced the price band for its initial public offering (IPO) worth ₹3,900 crore. The company has set the price range at ₹210-221 per equity share with a face value of Re. 1 each. The IPO consists of a fresh issue worth up to ₹2,080 crore and an offer for sale by existing investors for the remaining amount.
Offer details
Public issue to open on November 7
The public issue will open for bidding on November 7 and close on November 11. Anchor investors can bid a day earlier, on November 6. The shares of Pine Labs will be listed on both the BSE and NSE exchanges. The IPO includes an offer for sale (OFS) of up to 8.23 crore equity shares by existing shareholders such as Peak XV Partners, Actis, Mastercard, PayPal, Sofina Ventures, Madison India among others.
Employee benefits
Employee reservation and discount
The offer also includes a reservation for eligible employees worth up to ₹2.5 crore. Employees bidding under this category will get a discount of ₹21 per equity share on the final offer price. This move is aimed at boosting employee participation in the company's public offering. Retail investors can bid for a minimum of 67 equity shares and in multiples thereafter.
Valuation scrutiny
Valuations and allocation
The price to earnings (P/E) ratio of the offer is 144.83x at the lower end of the price band (₹210) and 152.41x at the upper end (₹221), based on diluted EPS for FY25. These valuations are much higher than the industry average P/E ratio of 61.78x. The offer will be made through a book-building process with allocation according to SEBI norms: minimum 75% for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Bidders (NIIs), and 10% for Retail Individual Investors (RIIs).
Fund allocation
Use of proceeds and BRLMs
The proceeds from the IPO will be used for international expansion, technology investment, and debt reduction. Axis Capital, Morgan Stanley, Citigroup, JP Morgan, and Jefferies India are the book-running lead managers (BRLMs) to the offer, while KFin Technologies Limited is its registrar. The allotment of shares under this issue will be finalized on November 12, while listing on BSE and NSE is expected by November 14.